Some Banned Chinese Milk Is Still Being Sold

(Wall Street Journal China)



Despite orders from China's central authorities to recall all milk produced before Sept. 14, banned milk from two of China's biggest dairies was still being sold this week at a discount to students in the southern city of Guangzhou through stores and milk dealers.


The incidents call into question whether China's central government can deliver on its promise to clean up the country's dairy industry after contaminated infant formula sickened tens of thousands of children.


On Oct. 11, six government agencies issued an order that all dairy products dated from before Sept. 14 -- regardless of brand -- be pulled from stores for testing, according to China's state-run Xinhua News Agency. That recall was made public on Tuesday, Oct. 14, and has been widely publicized on state television and via news agencies.


Guangzhou University students say that since the recall was ordered on Oct. 11, liquid milk from Mengniu Dairy Co. and Inner Mongolia Yili Industrial Group dated from before Sept. 14 has been sold at a deep discount around the campus of this school of 17,000.


Earlier this week, "I saw some dealers come to our campus to sell the milk. You can buy one, get one free. The [school] administration didn't pay attention to them," said Chen Xuzhao, a student at the university, in a phone interview.


Another student, Cai Xiaowei, said in a phone interview that she bought Mengniu "Student" milk, a line of liquid milk marketed specifically to students, from a dealer in the street for 28 yuan ($4.09) on Tuesday, 32% off the original price. The milk was marked as being produced in July.


It's unusual for dealers to sell milk on campus streets, and it's unclear where they got the milk they were selling.


The sales to college students were reported Thursday by Xinhua, citing the Guangzhou Daily, a newspaper.


After authorities discovered that dairy company Shijiazhuang Sanlu Group Co., 43% owned by New Zealand's Fonterra Co-operative Group, was selling melamine-laced infant formula, thousands of tons of milk products were pulled from shelves. More than 20 brands of milk formula were found to be contaminated with an industrial chemical, melamine. As of Wednesday, more than 5,000 children remain hospitalized with kidney problems; at least three have died. The scandal sparked discoveries around the world of products using Chinese dairy ingredients that turned out to contain melamine. Mengniu, Yili and another major brand, Bright Dairy & Food Co., were implicated for having melamine in a wide range of products from liquid milk to yogurt.


Despite the bans, Mengniu's milk has made its way via dealers and distributors to Guangzhou University's campus. A store clerk at Huijia Supermarket on campus confirmed that it was selling milk from before Sept. 14, and that after a sales promotion, all the products had sold out by Monday -- after the ban was issued, but before it was made public. It isn't clear whether the milk is still being sold, contrary to government regulations, on other campuses.


A spokeswoman from Mengniu said she was looking into the matter, and that the company has "required the products [be pulled] off shelves and not sold anymore." Yili could not be reached for comment.


Students who bought the milk say they did so voluntarily, and weren't alarmed about the possibility that the discounted products contained melamine. Xu Ming, a technology student at Guangzhou University, said "We are not worried about the melamine. We didn't have problems when we drank the milk before, so it should be OK now as well." 10-16-08



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